Housing Update

Athens, Greece

Rents increased in Athens, where demand from expatriates and locals is high and supply is limited. There has been no new construction for many years, and none is expected. Renovations are rare, but owners who do renovate often list their properties on the short-term market, which is much more lucrative than the long-term. This practice, however, further lowers long-term housing supply.

Turkey

Rents in Turkey decreased due to lower demand, the depreciation of the lira, and the economic conditions that resulted from recent government policies and security concerns. A recent change in lease laws required that all contracts be signed and paid in Turkish lira (TRY) instead of USD or EUR. This decree was overturned, however, and foreign residents can once again enter into contracts in foreign currencies. These changes have caused a great deal of confusion for expatriates and companies with expatriates in Turkey.

Leicester, U.K.

The rental market in Leicester is strong following a recent increase in demand. Over the past few years the population has increased in many smaller cities in England as people have moved to more affordable areas, hoping to save money to buy their own homes. Leicester is a prime example, with rents increasing faster than the national average. Leicester’s central location and its reputation as a key transportation hub and engineering center have drawn many assignees.

Guangzhou & Shenzen, China

Guangzhou and Shenzhen have stable but strong and growing rental markets. While rents for units in some of the most popular buildings increase every year, rents in less competitive buildings tend to decrease. Due to an increase in regional, single assignee arrivals, smaller, one- and two-bedroom apartments attract more demand than larger units, but overall supply continues to meet demand despite low vacancy rates. Shenzhen has implemented a policy intended to control the sales market, making it illegal to sell a property within three years of purchasing it. This move was implemented to slow the effects of China’s heavily speculative property market.

Yokohama, Japan

New and ongoing business is drawing expatriates into the Yokohama housing market. While rents for smaller apartments have been mostly stable, rents for houses have increased. Most houses with three to five bedrooms have been rented, and available three-bedroom apartments tend to be older properties. Commuting from the greater Tokyo area is still a preferred option for those who can’t find desirable rentals in Yokohama. As a result, there is very little construction of new expatriate-quality rentals in Yokohama.

Goods and Services Update

Highlights from our in-depth on-site surveys

VenezuelaSouth KoreaArgentina

Venezuela

On August 20, the Bolivar Fuerte (VEF) was redenominated and the Bolivar Soberano (VES) became active. The VES is pegged to the world’s first state-backed cryptocurrency, the petro, which is reported to represent one barrel of oil. The petro’s value when it was launched was set by the government at 3,600 VES to the petro, or 60 USD. Since then the peg has been changed to 9,000 VES to the petro. Public sales of the petro officially began in late October and the Venezuelan government is making a strong push to foster its adoption, including making it the required form of payment for passport processing, accepting it for oil production payments in 2019, and, most recently, paying pensions in the new currency.

Although public sales of the petro officially began in late October, there is considerable skepticism about the actual existence of the petro. No major cryptocurrency exchanges trade it and no shops are believed to accept it. Additionally, it has been reported that the oil reserves that were pledged to back it currently have no way of being accessed. Many commentators have seen the petro as the government’s attempt to revive its fiat currency and evade international sanctions.

The introduction of the VES and the petro has had little impact on Venezuela’s current hyperinflation. Since its introduction, the official rate of the VES has depreciated rapidly to 637 VES to the dollar. However, there continues to be a black market rate, which currently stands at 730 to the dollar.

South Korea

During AIRINC’s November on-site surveys in South Korea, aspirin was still absent from pharmacy shelves. The 500mg tablets have not been available for purchase since December 2016, when the South Korean Ministry of Food and Drug Safety determined that the dissolution rate did not meet its standards. While observers expected aspirin to return in the third quarter of 2018, production issues have delayed the drug’s reintroduction to the market. When asked, pharmacists said they hoped to have it back in stock in the next few months. Aspirin in the 100mg dosage and other types of painkillers, such as ibuprofen, are still available. As with any location, expatriates who have brand and dosage preferences should consider packing over-the-counter medicines bought in their home countries, but only after checking the relevant laws on bringing medicines into their destination countries for personal use. Medicines sold over the counter in some countries may require a prescription in others. For prescription drugs, a doctor’s note or an official prescription is often required. In either case, transporting medicine in its original container is advisable.

Argentina

Inflation in Buenos Aires persists as the peso continues to depreciate against the U.S. dollar. Inflation is high in all categories, but our survey found that it is typically highest for physical/tangible goods and lower for most services. Prices for personal care services (haircuts and manicures) and clothing services (laundry and dry cleaning) have increased at a slower rate than prices in other categories, tempering inflation in the past three months and throughout the year. Despite much higher overall inflation during the year, the official minimum wage in Argentina rose less than 13% in 2018, and that slow wage growth has kept domestic services inflation lower than average. Wage requirements are set to rise more sharply in 2019.

There are some exceptions to the trend of lower inflation for services, particularly automotive maintenance and public transportation. The increased cost of supplies needed for auto maintenance services, such as oil for oil changes, has kept inflation high. Many automotive supplies in Argentina are imported, so depreciation makes cost increases in local currency inevitable. From August to November, Buenos Aires subway and bus ticket prices increased significantly as the city strained to reduce the fiscal deficit.

Survey Location Update

Q4 Surveyed Locations and Upcoming Q1 Survey Locations

AIRINC surveys more than 150 locations each quarter.

Q4 Surveyed LocationsQ1 Upcoming Surveys

Europe, Asia, and mainland Southeast Asia
In response to market volatility, we also conducted survey updates in Buenos Aires and Caracas in the fourth quarter.

North America, Central and South America, the Middle East, Africa, and maritime Southeast Asia-Pacific